Representative Image (AI-generated)
The Iowa Supreme Court ruled in her favour on November 6, 2026, in Newrez LLC, d/b/a Shellpoint Mortgage Servicing v. In February 2023, Wells Fargo filed a foreclosure lawsuit against both co-owners. The bank argued that payments had not been made since May 2022 and sought to foreclose on the property. The amount claimed, including principal, interest and fees, exceeded $247,000.
The justices held that the woman qualified as a borrower under the mortgage and was therefore entitled to a separate notice of her right to cure the default before foreclosure proceedings could move forward. Lynae D McMillen Dickey Tesdall. Tesdall challenged the action, arguing that she had not received the legally required notice of her right to cure the default.
The decision , available on Justia, reversed the district court’s foreclosure judgment and vacated an earlier appeals court decision.
In August 2024, while the foreclosure case was pending, Wells Fargo assigned the mortgage to Newrez LLC, doing business as Shellpoint Mortgage Servicing, which was then substituted as the plaintiff. The Supreme Court examined Iowa Code Section 654.2D, which requires lenders seeking to foreclose on a homestead to provide borrowers with a notice of the right to cure a default. The law gives borrowers 30 days from the date the creditor gives the notice to pay overdue instalments or otherwise correct the default before the creditor can proceed with foreclosure. She also owned 50% of the property, lived there and had pledged her ownership interest as security for the financing.
Because she had not signed the promissory note and was not personally liable for repayment, it reasoned that Tesdall was not entitled to the notice. They explained that the relevant question was whether Tesdall was a borrower on the mortgage, not whether she had personally signed the underlying promissory note. The district court nevertheless granted summary judgment in favour of the lender. It also relied on a mortgage provision stating that notice to one borrower would count as notice to all borrowers. The justices disagreed with the lower courts’ interpretation of the term borrower. The court pointed out that Wells Fargo’s own mortgage document identified her as a borrower. The justices further explained that Iowa’s homestead laws are intended to protect homeowners and must be interpreted broadly in their favour. They rejected the lender’s argument that notifying one borrower was sufficient. Under the applicable law, each borrower entitled to protection had to receive the required notice. The court also noted that Aegerter no longer lived at the property, while Tesdall continued to occupy it as her home.
The Iowa Court of Appeals upheld that decision, prompting Tesdall to seek further review before the state Supreme Court.